Remember the days, when a gold mining company, making $100 in...

Remember the days, when a gold mining company, making $100 in profits, when producing every ounce of gold, found itself in a rising gold market, with the gold price increasing by $100, then technically the company doubled in value. In other words, the investors would buy shares, and not physical gold, as their returns were leveraged, compensating for risks, such as mine wall collapses.



How then to explain rising gold prices, and flat-lining gold shares?

Among the largest companies on the NYSE Arca Gold BUGS Index,Colorado-based Newmont has experienced a 24% drop in its share price over the past year.Similarly, Canadian BarrickGold also saw a decline of 6.5% over the past 12 months.

A couple of comments from a thread..

'The common shares of mining companies are financial derivatives.

If you can't understand the simple fact that the investment banks are using leveraged dollars to control the mining shares and why this is causing a a large deviation in stock price vs.underlying asset value, then get back to me when you do.'

'The miners are the only stocks allowed to be naked shorted

As long as the corrupt bankers can do this the mining stocks will go no where.'

However, what happens, when the mining companies, flush with cash, increase their dividends, by 3-4 times..